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Anthropic's mostly business-facing LLM faces easier customer switching than Alphabet's entrenched consumer products. Even with the best LLM, businesses can switch to cheaper good-enough models; Google has spent 25 years embedding search, email, Maps, Android and YouTube. Reuters reports some investors discussed $1.5T for its IPO; $2.2T was a whisper. Anthropic should in no way be worth half of Alphabet now; $16.8B Q3 revenue is not profit, leaving zero FOMO for its IPO. x.comÂ
Alphabet and Amazon offer better risk/reward than Anthropic private shares at today's prices. Secondary markets price Anthropic about 44% above a rumored $900B raise, plus one-time fees of up to 5%, nearly a 50% premium, on top of illiquidity, multi-layered SPV risks and tax hassles. Even at a $4T valuation, Alphabet is preferable to Anthropic at almost a third of that, and Amazon offers Anthropic exposure. Paying a higher ratio for Anthropic later is possible, but not now. x.comÂ
Amazon and Alphabet offer early exposure to Anthropic through their shares, and both are better run companies than Anthropic. x.comÂ
Google's search is becoming less profitable as AI agents disrupt its core business. Even perfect execution could make the transition painful, and Google is famously poor at new products. Its conduct over the past decade also raises stronger ethical objections than Meta's. Despite strong fundamentals, explosive cloud growth, no real risk and substantial growth ahead, Alphabet is unattractive relative to most other major AI companies. x.comÂ
Alphabet's earnings weakened the investment case because it missed on YouTube, Search, services, subscriptions and earnings, while reporting $0 in buybacks and double the negative free cash flow of last quarter. Cloud revenue was impressive, but Alphabet is a hold here and needs to come down significantly before adding. x.comÂ
Google Cloud's accelerating growth positions it to lead the AI cloud market, strengthening Alphabet beyond Search. It may pass Azure next quarter, then AWS, rising from #3 to #1 in 18-24 months. Selling its Anthropic stake could fund 12-18 months of capex and buybacks, but moving roughly $300B at market price without harming their TPU and Cloud partnership is unlikely. Alphabet is cheaper than Anthropic on sales or earnings multiples; the market likely expects a 2027 capital raise. x.com x.com … Show more
Alphabet's businesses beyond search are why it will lead the real AI boom. Google Cloud, DeepMind and Waymo broaden its reach, and its $900 million SpaceX investment is now worth $85 billion. Fear emerging as the shares fall is an opportunity; a decline toward the buy zone is welcome, even as Q3 capex has taken a large hit out of free cash flow. x.com x.com x.com x.comÂ
Changing search habits may threaten Alphabet's Search business. Personal search use has changed a lot, and that looks likely to become a broader trend. Search remains a real concern; buying more Alphabet right now looks unlikely. x.com x.comÂ
Alphabet's fast-growing Cloud business could offset pressure on Search as AI agents bypass ads and links. Cloud is already half Search's size, grew 103% versus Search's 12%, and is on track to overtake it; that makes the sell-off a great opportunity. Alphabet also owns SpaceX shares worth about $80 billion. x.comÂ
Alphabet's vertical integration and moat make its current valuation attractive. Its forward P/E is 19.78, below the 22.51 median shown since 2019. Alphabet is also valued below Tesla and SpaceX combined, despite the chart showing Google's quarterly revenue far exceeding theirs; that comparison does not add up. x.com x.comÂ
Slower Google Search growth adds to doubts about paying a premium for Alphabet. Search revenue rose 12% year over year to $63.4 billion in Q3 2026, down from 17% the prior quarter and 19% two quarters earlier; even that 19% figure did not pass the smell test. Google remains a great company, but its stock would be worth buying at a lower price. x.com x.comÂ
Alphabet's search monopoly faces a different competitive game as agent companies build their own search tools. Google Cloud grew 103%, but that was not enough to offset disappointing ads growth. Its only path is to accelerate AI training and keep spending on capex. Search will never be the same, and the risk-reward has changed, though Alphabet remains an optimistic prospect. x.com x.com x.comÂ
